Can income growth alone increase household consumption of cleaner fuels? Evidence from Pakistan

Journal title ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT
Author/s Muhammad Irfan, Michael P. Cameron, Gazi Hassan
Publishing Year 2022 Issue 2021/2
Language English Pages 26 P. 121-146 File size 276 KB
DOI 10.3280/EFE2021-002006
DOI is like a bar code for intellectual property: to have more infomation click here

Below, you can see the article first page

If you want to buy this article in PDF format, you can do it, following the instructions to buy download credits

Article preview

FrancoAngeli is member of Publishers International Linking Association, Inc (PILA), a not-for-profit association which run the CrossRef service enabling links to and from online scholarly content.

Consumption of solid fuels by households is a major cause of indoor air pollution (IAP) and can severely damage health and the environment. The Environmental Kuznets Curve (EKC) literature suggests that as poor and middle-income countries grow, households will climb the ‘energy ladder’ and adopt cleaner fuel technologies. This paper critically assesses that claim, using data from the Pakistan Social and Living Standards Measurement (PSLM) Survey 2013- 14. A novel aspect of our study is that, rather than treating the choice to use each fuel type as independent, we instead focus on the households’ choice of fuel mix, using cluster analysis to determine in a data-driven way the fuel mixes that households actually employ. Importantly, despite income being a strong determinant of fuel mix selection, we show that income growth alone is unlikely to lead to substantial uptake of cleaner fuels. Our results challenge a practical aspect of countries moving along the EKC, and suggest that in order to reduce IAP direct policy intervention will be required.

Keywords: fuel choice, energy mix, income growth, energy ladder, environmental kuznets curve, Pakistan.

Jel codes: D71, P18, P28

  1. Alem, Y., Beyene, A. D., Köhlin, G. & Mekonnen, A. (2016). Modeling household cooking fuel choice: A panel multinomial logit approach. Energy Economics, 59, 129-137.
  2. Alem, Y., Hassen, S. & Köhlin, G. (2014). Adoption and disadoption of electric cookstoves in urban Ethiopia: Evidence from panel data. Resource and Energy Economics, 38, 110-124.
  3. Ali, G., Ashraf, A., Bashir, M. K. & Cui, S. (2017). Exploring environmental Kuznets curve (EKC) in relation to green revolution: A case study of Pakistan. Environmental Science & Policy, 77, 166-171.
  4. Apergis, N. & Ozturk, I. (2015). Testing Environmental Kuznets Curve hypothesis in Asian countries. Ecological Indicators, 52, 16-22.
  5. Arnold, J. E. M., Köhlin, G. & Persson, R. (2006). Woodfuels, livelihoods, and policy interventions: Changing Perspectives. World Development, 34(3), 596-611.
  6. Brouwer, R. & Falcão, M. P. (2004). Wood fuel consumption in Maputo, Mozambique. Biomass and Bioenergy, 27(3), 233-245.
  7. Burke, P. J. (2013). The national-level energy ladder and its carbon implications. Environment and Development Economics, 18(4), 484-503. Caliński, T. & Harabasz, J. (1974). A dendrite method for cluster analysis. Communications in Statistics, 3(1), 1-27. DOI: 10.1080/03610927408827101
  8. Campbell, B. M., Vermeulen, S. J., Mangono, J. J. & Mabugu, R. (2003). The energy transition in action: urban domestic fuel choices in a changing Zimbabwe. Energy Policy, 31(6), 553-562. DOI: 10.1016/S0301-4215(02)00098-8
  9. Chafe, Z. A., Brauer, M., Klimont, Z., Van Dingenen, R., Mehta, S., Rao, S., ... & Smith, K. R. (2014). Household cooking with solid fuels contributes to ambient PM2. 5 air pollution and the burden of disease. Environmental Health Perspectives, 122(12), 1314-1320.
  10. Choumert-Nkolo, J., Combes Motel, P., & Le Roux, L. (2019). Stacking up the ladder: A panel data analysis of Tanzanian household energy choices. World Development, 115, 222-235.
  11. Edwards, J. H. Y. & Langpap, C. (2012). Fuel choice, indoor air pollution and children’s health. Environment and Development Economics, 17(4), 379-406. DOI: 10.1017/S1355770X12000010
  12. International Energy Agency (2021). Energy Technology Perspectives 2020. Paris: International Energy Agency. Retrieved February 3, 2022 -- https://www.iea.org/reports/energytechnology-perspectives-2020.
  13. Farsi, M., Filippini, M. & Pachauri, S. (2007). Fuel choices in urban Indian households. Environment and Development Economics, 12(06), 757-774. DOI: 10.1017/S1355770X07003932
  14. Gatto, A., Ferrari, M. & Sadik-Zada, R. E. (2017). Is Waste-to-Energy an Effective Strategy to Increase the Resource Efficiency of the Economy? A Panel Data Approach to Circular Economy in EU. Conference Paper. Associazione Italiana per gli studi sulla Qualità della Vita – National Conference on Quality of Life.
  15. Government of Pakistan (2021). Updated Nationally Determined Contribution 2021 -- https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/Pakistan%20First/Pakistan%20Updated%20NDC%202021.pdf.
  16. Grossman, G. M. & Krueger, A. B. (1991). Environmental Impacts of a North American Free Trade Agreement (Working Paper No. 3914).
  17. Grossman, G. M. & Krueger, A. B. (1995). Economic Growth and the Environment. The Quarterly Journal of Economics, 110(2), 353-377. DOI: 10.2307/2118443
  18. Halkidi, M., Batistakis, Y. & Vazirgiannis, M. (2001). On clustering validation techniques. Journal of Intelligent Information Systems, 17(2-3), 107-145. DOI: 10.1023/A:1012801612483
  19. Heltberg, R. (2004). Fuel switching: evidence from eight developing countries. Energy Economics, 26(5), 869-887.
  20. Heltberg, R. (2005). Factors determining household fuel choice in Guatemala. Environment and Development Economics, 10(3), 337-361. DOI: 10.1017/S1355770X04001858
  21. Hosier, R. H. & Dowd, J. (1987). Household fuel choice in Zimbabwe. Resources and Energy, 9(4), 347-361. DOI: 10.1016/0165-0572(87)90003-X
  22. Huttunen, K. (2018). Indoor Air Pollution. In Clinical Handbook of Air Pollution-Related Diseases (pp. 107-114). DOI: 10.1007/978-3-319-62731-1_7
  23. IEA, Energy statistics -- https://www.iea.org/countries/pakistan.
  24. Irfan, M., Cameron, M. P. & Hassan, G. (2018). Household energy elasticities and policy implications for Pakistan. Energy Policy, 113, 633-642.
  25. Irfan, M., Cameron, M. P. & Hassan, G. (2021). Interventions to mitigate indoor air pollution: A cost-benefit analysis. Plos one, 16(9), e0257543.
  26. Jan, I., Khan, H. & Hayat, S. (2012). Determinants of Rural Household Energy Choices: An Example from Pakistan. Polish Journal of Environmental Studies, 21(3), 635-641.
  27. Joon, V., Chandra, A. & Bhattacharya, M. (2009). Household energy consumption pattern and socio-cultural dimensions associated with it: A case study of rural Haryana, India. Biomass and Bioenergy, 33(11), 1509-1512.
  28. Jumbe, C. B. L. & Angelsen, A. (2011). Modeling choice of fuelwood source among rural households in Malawi: A multinomial probit analysis. Energy Economics, 33(5), 732-738.
  29. Karimu, A., Mensah, J. T. & Adu, G. (2016). Who Adopts LPG as the Main Cooking Fuel and Why? Empirical Evidence on Ghana Based on National Survey. World Development, 85, 43-57.
  30. Kim, K.-H., Jahan, S. A. & Kabir, E. (2011). A review of diseases associated with household air pollution due to the use of biomass fuels. Journal of Hazardous Materials, 192(2), 425-431.
  31. Lakshmi, P. V. M., Virdi, N. K., Thakur, J. S., Smith, K. R., Bates, M. N. & Kumar, R. (2012). Biomass fuel and risk of tuberculosis: a case-control study from Northern India. Journal of Epidemiology and Community Health (1979-), 66(5), 457-461.
  32. Leach, G. (1992). The energy transition. Energy Policy, 20(2), 116-123. DOI: 10.1016/0301-4215(92)90105-B
  33. Lee, L. Y.-T. (2013). Household energy mix in Uganda. Energy Economics, 39, 252-261.
  34. Masera, O. R., Saatkamp, B. D. & Kammen, D. M. (2000). From Linear Fuel Switching to Multiple Cooking Strategies: A Critique and Alternative to the Energy Ladder Model. World Development, 28(12), 2083-2103. DOI: 10.1016/S0305-750X(00)00076-0
  35. McLean, E. V., Bagchi-Sen, S., Atkinson, J. D., Ravenscroft, J., Hewner, S. & Schindel, A. (2019). Country-level analysis of household fuel transitions. World Development, 114, 267-280.
  36. Mekonnen, A. & Köhlin, G. (2009). Determinants of Household Fuel Choice in Major Cities in Ethiopia. Retrieved from -- https://gupea.ub.gu.se/handle/2077/21490.
  37. Miah, Md. D., Foysal, M. A., Koike, M. & Kobayashi, H. (2011). Domestic energy-use pattern by the households: A comparison between rural and semi-urban areas of Noakhali in Bangladesh. Energy Policy, 39(6), 3757-3765.
  38. Mishra, V. (2003). Indoor air pollution from biomass combustion and acute respiratory illness in preschool age children in Zimbabwe. International Journal of Epidemiology, 32(5), 847-853.
  39. Mishra, V., Smith, K. R. & Retherford, R. D. (2005). Effects of cooking smoke and environmental tobacco smoke on acute respiratory infections in young Indian children. Population and Environment, 26(5), 375-396.
  40. Narasimha Rao, M. & Reddy, B. S. (2007). Variations in energy use by Indian households: An analysis of micro level data. Energy, 32(2), 143-153.
  41. Nasir, Z. A., Murtaza, F. & Colbeck, I. (2015). Role of poverty in fuel choice and exposure to indoor air pollution in Pakistan. Journal of Integrative Environmental Sciences, 12(2), 107-117. DOI: 10.1080/1943815X.2015.1005105
  42. Nilsson, M., Griggs, D. & Visbeck, M. (2016). Policy: Map the interactions between Sustainable Development Goals. Nature News, 534(7607), 320.
  43. Osiolo, H. (2009). Enhancing household fuel choice and substitution in Kenya /. Nairobi, Kenya: Kenya Institute for Public Policy Research and Analysis.
  44. Ouedraogo, B. (2006). Household energy preferences for cooking in urban Ouagadougou, Burkina Faso. Energy Policy, 34(18), 3787-3795.
  45. Pachauri, S. & Jiang, L. (2008). The household energy transition in India and China. Energy Policy, 36(11), 4022-4035.
  46. Peng, W., Hisham, Z. & Pan, J. (2010). Household level fuel switching in rural Hubei. Energy for Sustainable Development, 14(3), 238-244.
  47. Pundo, M. O. & Fraser, G. C. (2006). Multinomial logit analysis of household cooking fuel choice in rural Kenya: The case of Kisumu district. Agrekon, 45(1), 24-37. DOI: 10.1080/03031853.2006.952373
  48. Qiu, Y., Yang, F. A. & Lai, W. (2019). The impact of indoor air pollution on health outcomes and cognitive abilities: empirical evidence from China. Population and Environment, 40(4), 388-410.
  49. Rahut, D. B., Das, S., De Groote, H. & Behera, B. (2014). Determinants of household energy use in Bhutan. Energy, 69, 661-672.
  50. Rehman, A., Zhang, D., Chandio, A. A. & Irfan, M. (2020). Does electricity production from different sources in Pakistan have dominant contribution to economic growth? Empirical evidence from long-run and short-run analysis. The Electricity Journal, 33(3), 106717.
  51. Sadik-Zada, E. R. & Gatto, A. (2021a). The puzzle of greenhouse gas footprints of oil abundance. Socio-Economic Planning Sciences, 75, 100936.
  52. Sadik-Zada, E. R. & Gatto, A. (2021b). Energy Security Pathways in South East Europe: Diversification of the Natural Gas Supplies, Energy Transition, and Energy Futures. In M.
  53. Mišík & V. Oravcová (Eds.). From Economic to Energy Transition: Three Decades of Transitions in Central and Eastern Europe (pp. 491-514). Springer International Publishing. DOI: 10.1007/978-3-030-55085-1_17
  54. Scott, A. J. & Knott, M. (1974). A Cluster Analysis Method for Grouping Means in the Analysis of Variance. Biometrics, 30(3), 507-512. DOI: 10.2307/2529204
  55. Sehgal, M., Rizwan, S. A. & Krishnan, A. (2014). Disease burden due to biomass cookingfuel-related household air pollution among women in India. Global Health Action, 7. -- http://dx.doi.org.ezproxy.waikato.ac.nz/10.3402/gha.v7.25326.
  56. Sehjpal, R., Ramji, A., Soni, A. & Kumar, A. (2014). Going beyond incomes: Dimensions of cooking energy transitions in rural India. Energy, 68, 470-477.
  57. Shakeel, S. R., Takala, J. & Shakeel, W. (2016). Renewable energy sources in power generation in Pakistan. Renewable and Sustainable Energy Reviews, 64, 421-434.
  58. Stabridis, O. & van Gameren, E. (2018). Exposure to firewood: Consequences for health and labor force participation in Mexico. World Development, 107, 382-395.
  59. Stern, D. I. (2004). The Rise and Fall of the Environmental Kuznets Curve. World Development, 32(8), 1419-1439.
  60. Torres-Duque, C., Maldonado, D., Pérez-Padilla, R., Ezzati, M. & Viegi, G. (2008). Biomass Fuels and Respiratory Diseases. Proceedings of the American Thoracic Society, 5(5), 577-590.
  61. Zhang, X.-B. & Hassen, S. (2017). Household fuel choice in urban China: evidence from panel data. Environment and Development Economics, 22(4), 392-413. DOI: 10.1017/S1355770X17000092
  62. Bhatt, B. P. & Sachan, M. S. (2004). Firewood consumption pattern of different tribal communities in Northeast India. Energy Policy, 32(1), 1-6. DOI: 10.1016/S0301-4215(02)00237-9
  63. Bonan, G. B. (2008). Forests and Climate Change: Forcings, Feedbacks, and the Climate Benefits of Forests. Science, 320(5882), 1444-1449.

Muhammad Irfan, Michael P. Cameron, Gazi Hassan, Can income growth alone increase household consumption of cleaner fuels? Evidence from Pakistan in "ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT" 2/2021, pp 121-146, DOI: 10.3280/EFE2021-002006